Morning-Fresh: Declining Prices and the Right-to-Choose in a Faroese Fish Market

Sanna Laksa and Daniel Marszalec
Additional contact information
Sanna Laksa: Vadin P/F

No CIRJE-F-1141, CIRJE F-Series from CIRJE, Faculty of Economics, University of Tokyo

Abstract: Theory predicts that when homogeneous goods are auctioned sequentially, to prevent intertemporal arbitrage the sale prices should exhibit no trend over time. Ashenfelter (1989) was the first to empirically test this hypothesis, and found that prices in wine auctions tended to decline throughout the day. We use transactionlevel data from wholesale fish auctions in the Faroe Islands to test for price trends using two methods: price-ratios and regression analysis. Both methods agree that prices in our data are declining. Furthermore, the pattern persists both on aggregate, and within individual fish species. We attribute the price decline to two main factors: the declining number of bidders, and the possibly declining quality of fish, throughout the day. Though the dataset logs each unit of the same fish-type as identical, early auction winners have the right to choose their preferred box before the rest is re-auctioned. This is likely to contribute to a decline in perceived fish quality in later auctions that is unobservable in the data, but possibly important in motivating bidder behaviour.

Pages: 12 pages
Date: 2020-01
New Economics Papers: this item is included in nep-des
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.cirje.e.u-tokyo.ac.jp/research/dp/2020/2020cf1141.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:tky:fseres:2020cf1141

Access Statistics for this paper

More papers in CIRJE F-Series from CIRJE, Faculty of Economics, University of Tokyo Contact information at EDIRC.
Bibliographic data for series maintained by CIRJE administrative office ().